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12 September 2013

The Japanese carriers ANA and JAL will decide between going with the new A350-1000 or repeat the experience of being a launch customer for 787-10 and 777Xs.

In Japan, Boeing dominates with around an 80% market share. Flag carrier JAL -Japan Airlines has yet to buy an Airbus aircraft even though the political prodding to purchase Boeing jets partially built in Japan has lessened.This year, Airbus finally spied a breach in Boeing's Japanese fortress.Glitches with Boeing's 787s, which both JAL and rival All Nippon Airways have put at the center of their fleet planning, created an opening for it to offer its just-finished A350 to replace around 50 of the airlines' ageing Boeing 777s from 2020.

That window may, however, be closing as Boeing launches a charm counter-offensive to blunt Airbus and shore up its Japanese base. Boeing's order to its sales team from its Seattle commercial aircraft base is "do everything you can to win this order", a source familiar with the negotiations told Reuters.Airbus got a foothold at ANA, which operates Airbus A320s on short-haul services, but hasn't scored an order there since 2005. ANA's medium and long-haul fleet consists only of Boeing planes, and it is the world's largest operator of the787. Airbus's most notable success has been among Japan's emerging discount carriers, including an order by Skymark Airlines in 2011 for 6 A380s.

High-profile problems with the 787 -including a months-long grounding due to problems with the lithium-ion batteries- cost JAL and ANA millions of dollars and more importantly, it led to a large degree of frustration with Boeing in Tokyo.Airbus is offering the A350-900 to replace the 777-200s. It is also pushing the upcoming larger -1000 to replace the 777-300 family.Boeing is offering the largest variant of the 787, the -10, as well as the 777X.

At the Paris Air Show in June, chief Airbus salesman John Leahy said: "It is just a matter of time before JAL and ANA fly Airbus wide-body aircraft".“I’d be very surprised, but I can say I’m looking for an improvement in our market share in Japan. We have nowhere to go but up. I would be hopeful we will get a breakthrough in Japan, but I don’t want to predict a timeline,” Leahy commented to Leeham News.

Within JAL, there is a division between those who want to stick with Boeing and those who prefer an alternative supplier. The 787's technical problems may have increased the frustration with Boeing, but a source close to JAL said that alone wouldn't tip the balance to Airbus."JAL still has confidence in Boeing's aircraft. The decision hinges on a larger strategic discussion about its aircraft procurement strategy," the source close to JAL said."The question before the management is if they should stick to a known and reliable supplier, or order Airbus aircraft in order to ensure they have the best options from two relatively equal companies. The answer to that will guide the decision."

ANA spokesman Ryosei Nomura said the airline was considering both the 777X and the A350."At the moment we are gathering information and have not yet begun any formal assessment," Nomura said. "We don't yet know when we will reach a conclusion.""The Japanese carriers are facing a tough choice, go with Boeing and be a launch customer again for an aircraft that could slip beyond its 2019 start of delivery target, or pick Airbus, an unknown, but with a firmer delivery schedule," said a third source close to the negotiations.If they delay a decision, they may not enjoy the benefits of being among the early customers for the 777X or miss out on the delivery slots for the A350-1000."This is an intense battle, and the pressure is on the airlines and the aircraft manufacturers. There are so many variables at stake here. Whatever the decision is, someone will be very unhappy," said one of the sources familiar with the negotiations.Based on the article “Airbus struggles to loosen Boeing's grip on Fortress Japan” published in Reuters